Ego prevails in bids for Redskins Prestige of owning team in D.C. creates markup

December 22, 1998|By Vito Stellino | Vito Stellino,SUN STAFF

In a high-stakes battle of money and ego, the next round of offers for the Washington Redskins is due today in a bidding war that likely will lead to the highest price ever paid for a sports franchise in this country.

New York banker Howard Milstein and Bethesda businessman Daniel M. Snyder have bid more than $700 million and now the other contenders, including current owner John Kent Cooke and Orioles owner Peter Angelos, have to decide whether to match or top it.

When Milstein and Snyder made their bid last week, they said it would be on the table for one week.

It's uncertain if they will keep the $700 million offer on the table when the investment banking firm of Morgan Stanley Dean Witters reviews this latest round of bids and narrows the field to two or three finalists. It then may make take another month for a final round of bidding to be completed.

But the sale price for the franchise, which includes 80,000-seat Jack Kent Cooke Stadium in Landover, still figures to easily top the $530 million paid for the expansion Cleveland Browns by Cleveland businessman Al Lerner.

The ego involved in owning a franchise in the nation's capital where the owner can wine and dine important politicians and the rich and famous in his luxury box at Redskins games is now driving the bidding.

Nathan Landow, the Maryland land developer who was a partner with New York financier Andrew Penson and dropped out of the bidding at $500 million, said, "Over $475 million, it's ego."

Marc Ganis, a Chicago sports consultant who attempted to buy the Minnesota Vikings with Maryland author Tom Clancy, said a price of $650 million might be justified, but said that figures above that involve ego.

"That's where the ego comes in, the ego issue is big, very big," he said. "Once you get into a certain stratosphere, you need more and more to get much of a rush."

The other bidders include Phoenix shopping center magnate Sam Grossman, who has aligned himself with former Redskin coach Joe Gibbs; Texas investor David Bonderman, who's in a group with shipbuilder John McMullen; Chuck Dolan of Cablevision in New York; Hollywood TV producers Ben and Tony Scotti: and Jerry Wolman, former owner of the Philadelphia Eagles.

Ganis said the ego factor may not be as important to Dolan, Angelos and McMullen "because they're already players" in various sports ventures.

Dolan's company owns the New York Knicks and Rangers and McMullen owns the New Jersey Devils.

Angelos did not return phone calls to his office and the bidders have signed confidentiality agreements promising not to reveal details of their bids.

Ganis said the only way the deal would work in a financial sense is if "you structure your debt in a certain way and you're willing to let your equity sit there with a minimal return and you're banking on future appreciation of the asset."

Ganis noted that if an owner put down $250 million, he would also be losing "cash opportunity costs" because he couldn't invest the money in other projects.

The Redskins are worth more than most NFL teams because they have 208 luxury boxes -- with room for another 75 or so -- plus 15,000 club seats. Most teams have around 100 luxury boxes and 8,000 to 10,000 club seats.

What's puzzling about the process is why the late Jack Kent Cooke didn't simply leave the team to his son, John. Instead, he ordered it to be sold by trustees with the money going to a foundation. Neither did Cooke leave his son enough money to buy it, but NationsBank is helping fund his bid.

"If all things are close to equal, Cooke will get it," Ganis said.

Ganis said that means if Cooke's bid is within $25 million to $50 million, he is likely to keep the team.

The fact that the sale process is likely to drag on for another month could save the job of coach Norv Turner.

Despite the 6-9 team's rally from an 0-7 start, Turner has yet to make the playoffs in five years as coach and he has made some notable personnel blunders, including going with Heath Shuler and Gus Frerotte at quarterback and drafting troubled wide receiver Michael Westbrook.

A new owner likely would fire Turner and start fresh. However, if he doesn't get control of the team until February or March, it might be too late to find a quality coach and that could give Turner another year.

After the bidding process is completed, the sale has to be approved by the NFL owners and that process is likely to take a few weeks.